Credit Suisse’s Erin Wilson initiated coverage of the company with a Neutral rating and price target of $43.

Competitive Advantage

“As the fifth largest contract research organization (CRO), PRAH should benefit from a strong fundamental backdrop for CROs with sustained R&D spending by biopharmaceutical companies and greater outsourcing of these services as the costs and complexity of clinical development heighten,” Wilson said.

The analyst believes PRA Health has a clear competitive edge due to its widely diverse customer mix and incrementally flexible and broad service offering.

However, given that the stock currently trades at the highest valuation among its clinical CRO peers, Wilson believes these competitive advantages are already reflected in the valuation.

Momentum To Continue

According to the Credit Suisse report, “PRAH's flexible Strategic Solutions offering… is a competitive advantage that contributes to a more diverse customer mix and stable bookings. While this is an inherently lower margin business, upselling opportunities could be offsetting over time.”

Expressing optimism regarding the recent strength and stability in the company’s bookings, as PRA Health continues to capture share, Wilson mentioned that the request for proposal (RFP) flow is robust and the momentum is likely to continue into 2Q16.